Public works projects can seem out of reach when it comes to labor compliance. The list of documents appears endless and seems to get more complex each year.
Many small contractors do not have the administrative staff to keep up with the weekly and monthly needs involved with public works labor compliance document submittals. If a contractor is capable of performing the scope, then it should not skip bidding the project due to paperwork.
This article covers several ways to help small contractors streamline the process, ensure that compliance is met, and prevent funding issues whenever possible.
Public Works Process
The following is an example of how a contractor can structure the public works process:
- Bid the job: Does the contractor have the necessary licenses to comply? Check with your state about the details for any license requirements. And, ask the customer if any special licenses are needed (e.g., public works construction license).
- Create a clear request for information (RFI) and review of scope: In a timely manner, submit the RFI to the customer, which can include wage determination questions, safety protocol questions, etc. Determine if compliance is attainable before moving forward with a bid.
- Insurance: Public works projects will have extremely specific and detailed insurance requirements. Review the details to validate if your insurance carrier can comply.
- Subcontractors: Determine if subcontractors are needed. If so, prior to their bid, provide them with all information. Confirm with the subcontractors that they can comply.
- Awarded contract: Review the details of the entire contract. Refer to labor compliance codes within the contract and ensure a full understanding of what is expected can be performed.
- Schedule a preconstruction meeting: Meet with key field and administrative staff on requirements and goals to help with labor compliance success.
- Designate labor compliance tasks: Implement a standard operating procedure so the team can eliminate confusion up front and set themselves up for success. Outline which documents will be required and the frequency of submittals.
When bidding public works, the most important labor compliance and cost factor is the wage determination, which is the “listing of wage rates and fringe benefit rates for each classification of laborers and mechanics, which ha been determined to be prevailing in each area for a particular type of construction (e.g., building, heavy, highway, or residential).”1
Each public works job has a wage determination, which lists each trade and classification. Find your type of project, trade, and class on sam.gov or your state’s website. The customer should have the wage determination available for bidding purposes, so request the wage determination at time of bid to enable accurate bidding of labor costs and burdens, as unexpected excess field labor can bury the profits.
If the contract is awarded, then the detailed labor compliance requirements will be specifically outlined. But that’s already too late. Don’t be afraid to ask upfront questions when bidding.
Ask Questions & Verify Requirements
After reviewing the scope, put together a specific RFI outline to verify that all necessary labor compliance factors are being considered in the bid. Public works projects have prequalification packets to determine if contractors can comply with the project labor compliance. Contractors that are bidding on and awarded a project must be able to comply; noncompliance can turn an executed project into chaos.
Contractors that can comply are likely to be hired more often on public works projects. Contractors that consistently perform well on public works projects can be labeled as a preferred contractor for certain scopes because of the ease and ability to comply with labor compliance. Implementing a specific procedure for bidding public works projects will make the process easier and streamlined.
Hiring subcontractors on public works contracts is equally as important as your own scope. Subcontractors are required to comply with the same labor compliance requirements, which can cause serious problems if not vetted properly.
Communicate and collaborate with the subcontractors on compliance and designate someone in the office as the point of contact with the subcontractors to ensure successful labor compliance.
Roles & Procedure
Labor compliance is a very calendar-driven process, as most documents are due weekly and monthly. Assigning staff members on your team to handle certain categories of labor compliance can streamline the process.
For example, since union documents (which confirm that fringes are paid to the unions timely) are normally due monthly, have the same person handle that task each month. This builds a relationship with the unions and encourages collaboration with your customer as well. Remember, collaboration is a key to labor compliance success and goes beyond just emailing. Don’t be timid — pick up the phone and build those relationships.
Preconstruction meetings are a huge benefit to labor compliance success. Communicating what is expected with the field and office staff before work begins onsite will only lead to a higher accuracy of labor compliance submittals. The key personnel to make this successful will start in the field and end in the office.
The leaders in the field — whether forepersons or superintendents — should be trained on what is important to public works labor compliance. Not only is the task of completing the scope important, but there can also be extra safety protocols required. Public works contracts can have an entire section on safety protocols that every contractor onsite must follow. This is a great question to ask at the time of bidding to prepare in advance. Safety first is embedded in every construction worker’s mind, as it is one of the highest priorities for success.